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‘Managed decline’: the uncertain future for British rail after cuts to HS2

Rishi Sunak cast his scaling back of the UK’s flagship HS2 rail project as the beginning of a revival for British transport, promising investment “that will make a real difference” to the country.

But his decision this week to cancel the northern leg of HS2 sent shockwaves through a UK rail industry already struggling with the aftermath of the pandemic and now gloomily warning of “managed decline”.

“There is a strong sense from the government that railways are too expensive to build from scratch and too expensive to subsidise,” said Tony Travers, professor at the London School of Economics.

Sunak’s decision was the final marker that in the UK, “the second golden age of the railways has come to an end,” he added.

The prime minister’s declaration has added to the sense of crisis that has beset train travel in the UK since 2020.

Since the pandemic rail executives have grappled with uncertainty over passenger numbers and revenue, and a collapse in industrial relations that has led to frequent strikes.

Sunak said the government would shift £36bn planned for HS2’s northern leg to other road, rail and bus projects which would give people in the north of England and Midlands “significant improvements to the journeys they rely on every day”.

This would, he said, end the “old consensus” which focused on linking up major cities and London “at the exclusion of everywhere else”.

The shifting priorities of the government were symbolised by Sunak’s decision to allocate £8.3bn of the money not to rail, but to fixing potholes.

Andy Bowes-Roden, deputy editor of Modern Railways magazine, called the mood in the rail industry “grim”.

The PM’s declaration on HS2 has added to the sense of crisis that has beset train travel in the UK since 2020 © Darren Staples/Bloomberg

“I’ve never known so many people take such a negative view . . . you have to go back to the Beeching cuts of the 1960s to see less optimism about the future of the railways than we have now,” he said.

The Beeching report was a landmark and now notorious document that led to the closure of stations and miles of track across the UK in the 1960s.

The onset of the pandemic in 2020 triggered an existential crisis for UK railways as passengers worked from home, a trend that has persisted and weighed on passenger numbers.

Passenger numbers are still around 20 per cent below pre-pandemic levels, with high paying commuters and business travellers particularly slow to return.

The Beeching report was a landmark and now notorious document that led to the closure of stations and miles of track across the UK in the 1960s. © PA

The government put £13.3bn into supporting the railway in the 2021-2022 financial year, the most recent for which data is available, up from £4.7bn in 2018-2019, according to data from the Office for Rail and Road.

Given the constraints on the public finances and competing demands for cash, ministers have consistently said they cannot pour unlimited funds into an industry that needs to adapt to changing travel patterns.

In February, transport secretary Mark Harper said the railways were operating with a “broken model” which was “financially unsustainable”.

Train companies have been under pressure to significantly cut costs, including slimming down their timetables, cutting cleaners and caterers and running trains with fewer carriages to save on electricity and track access charges.

Asked what their company had cut in order to meet government cost saving targets, one railway executive replied: “everything”.

The starkest evidence of this is the industry proposal to shut nearly every ticket office in the country, which has sparked a furious response from unions, the travelling public and many politicians.

Many industry executives privately admit that they will be forced to row back on the scale of the cuts to ticket offices, but believe that reputational damage has been done.

Harper in February said that only “major reform” could break a “cycle of decline” in UK railways. Eight months later and executives said they had heard nothing on major reforms since, including on a landmark proposal to create a public body to run UK railways, called Great British Railways. 

“As far as we understand it’s been kicked into the long grass,” said one executive. 

The Department for Transport said the government was “committed to making our rail industry fit for the future, putting passengers first”. 

The onset of the pandemic in 2020 triggered an existential crisis for UK railways as passengers worked from home, a trend that has persisted and weighed on passenger numbers. © Toby Melville/Reuters

The DfT said it had invested £41bn into the railways since the start of the pandemic, and that the new series of projects announced by Sunak in place of HS2 “will deliver the transport that matters most to people”. It did not comment on the future of GBR. 

Andy Bagnall, chief executive of Rail Partners, which represents train operators, said “if we get reform right, the railway can still be an engine for green growth in Britain”.

“If we don’t, a generation will be put off from using rail to travel and move goods, leading to another era of managed decline,” he added.

UK rail’s troubles have been worsened by the most significant industrial action in a generation. Just miles from where Sunak was announcing the decision to cut HS2, no trains were running from an empty Manchester Piccadilly station as train drivers staged their 14th day of strike action since last summer, bringing virtually the entire rail network to a standstill.

Sunak’s decision to cancel the second phase of HS2 means high-speed trains will travel on dedicated lines only between London and Birmingham, before joining the congested West Coast Mainline for journeys further north.

The industry proposal to shut nearly every ticket office in the country has sparked a furious response from unions, the travelling public and many politicians. © Lucy North/PA

The government said it would also lift the planning safeguards which protected the second phase of the route from development, and sell off any land that had been bought on the route.

Industry experts said this decision — combined with a new plan for a smaller London terminus at Euston station — means it will be almost impossible for any future government to resurrect HS2 if demand for rail travel increases.

William Barter, a consultant who has worked on the project, said this amounted to a “scorched earth” policy to ensure the northern leg can “never be reactivated”.

In any event, the opposition Labour leader Sir Keir Starmer has refused to commit to reversing Sunak’s cuts. One promise he has made, however, is to fully nationalise the UK rail system.

With a general election expected next year, “no one is going to be making long-term decisions,” said one rail executive.

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